About Those Military Pension Cuts …

Congress’ expected reversal on a small but outrage-inducing budget cut shows that it’s back to business as usual.

In December, the Paul Ryan budget deal included $6 billion in cuts to military pensions. In January, Congress is undoing those cuts.

Photo by Rod Lamkey/Getty Images

Solve this riddle: How much is $6 billion worth? In the December budget deal, the one that saved Christmas, $6 billion was the modest projected total for a small cut to the growth of military pensions. This was far, far punier than the entitlement reforms Washington used to talk about, but according to Rep. Paul Ryan, the House budget chairman, it represented “real changes to these autopilot programs that are the real drivers of our debt.” The idea came pre-endorsed by Erskine Bowles and Alan Simpson. And who didn’t like those guys?
One month later, Congress is plowing into the omnibus spending agreement, the bill that makes those budget numbers real. One-sixth of the $6 billion pension cut is already being clawed back for veterans disabled in combat and for military widows. That’s for a start, before Congress passes one of the competing bills that would restore the rest of the pension money—maybe by ending mail delivery on Saturday, maybe by denying the Refundable Child Tax Credit to illegal immigrants.
The saga of the military pension cuts is the story of how Washington got over its “Grand Bargain” fixation. Fed up with invented crises, no longer panicked about the deficit, Congress has rediscovered the joys of lobbyist pressure and voter pandering. That’s not necessarily a problem, especially if you’re a military veteran. It’s just an amusing farce. For starters, the cuts were spread out to cause minimal pain. They were designed to affect retirees younger than 62. They’d be phased in slowly, the cost of living adjustment to benefits decreasing by 0.25 percent in December 2014, by 0.5 percent in December 2015, and fully engaged by 2016. This wasn’t quite like sequestration, kludged together in the hopes that someone else would fix it. Negotiators remember it as an idea pulled from Simpson-Bowles and one that could possibly be revisited in 2015, when the military was expected to issue some guidance on pension reform.
The military would have to, because 12 years of war in Central Asia had boosted pension liabilities, bringing the total to $50 billion annually. “The Defense Department runs the risk of the fate of other corporate and government bureaucracies that were ultimately crippled by personnel costs,” then-Defense Secretary Robert Gates told Congress in 2011, “in particular, their retiree benefit packages.” Congress listened long enough to pass the budget bill. The rethinks started about five seconds later. “We know the federal government needs to curb its spending, balance its budget, and put an end to the sequester,” proclaimed the Veterans of Foreign Wars, “but this proposal needs to be buried.” Sen. Carl Levin, who chairs the Armed Services Committee, told Stars and Stripes that the benefits issue was under review. Even Paul Ryan started to talk about a way to undo the cuts to veterans. “We give them a slightly smaller adjustment for inflation because they’re still in their working years and in most cases earning another paycheck,” Ryan told the Weekly Standard after the budget glided through the House. “We delayed this provision so that it doesn’t take effect until the year 2016, which gives Congress and the military community time to address the broader compensation issue, including this provision, if people believe there’s a better way to solve this problem.”
Sure enough, people did. The Military Officers Association of America, one of the most sympathetic of all lobbying combines, went to work on Congress. The budget deal was intended to protect disabled veterans, but the eventual language didn’t make that clear enough. Presto—an easy opening for lobbyists and their allies to decry the cuts. Any candidate for office could decry the cuts, too, as possible New Hampshire Senate contender Scott Brown proved in a series of Fox News columns. “We shouldn’t be balancing our books by breaking the promises to the people who have put everything on the line for us,” wrote Brown. “What these Washington politicians don’t understand is that voters are smart enough to see this kind of hypocrisy and double-speak.”
The pension cuts turned into a miniature version of the old sequestration controversy, a more serious version of the World War II monument closure during the government shutdown. These cuts really would, eventually, reduce pensions by thousands of dollars per veteran. After a while, they had few defenders. On Tuesday, as Republicans were briefed on the details of the omnibus, they were cheered by the restoration of full pensions for some veterans but hungry for the rest. “I’m tellin’ ya, this is not going away,” said Virginia Rep. Scott Rigell. “I’m advocating for a full reversal. Generally, I think there’s universal agreement that we need to rein in spending. What Americans don’t want is for anyone to be singled out. And you could really make the argument that veterans are being singled out.”
Rigell, like 168 of his House colleagues, had voted for the budget. Why did so many Republicans agree to the pension cut if they were spring-loaded to condemn it? Simple: They assumed there’d be a way to undo them. “The only budget year you can count on is this year,” said South Carolina Rep. Mark Sanford, who voted against the budget. “On the pension cut: You tell me this was gonna stay? Anybody who’s ever observed this process would be surprised to see that stay.” Oklahoma Rep. Tom Cole, a leadership ally who voted for the budget, acknowledged that some went into the vote expecting the pensions to be restored. “I think for members that had that concern, who had a lot of military in their districts, absolutely,” he said. “There’s a difference between this group of Americans and other Americans who have real needs. For whatever reason, that’s what the negotiators arrived at, but there are plenty of vehicles out there to deal with this.” A few libertarian-minded Republicans are shrugging, unsurprised, by the scramble to undo the cuts. “In the past, we’ve been told: Vote for this, we’ll correct it later on,” said Michigan Rep. Justin Amash, another “no” vote on the budget. “They can make the numbers work at the time, then conceal it when the money’s added back.” That’s the minority position—the heavily, heavily outnumbered minority position. The acceptable spectrum of Republican opinion is between restoring all of the cuts and between patching them up until the military suggests something better.
“Don’t forget what Secretary Gates said,” said Sen. John McCain on Tuesday. “These entitlements are, quote, eating us alive.” The $6 billion was cut in anticipation of the military coming back with its own study in 2015, taking for granted that something would change. “There’ll be plenty of time. We’ll probably restore it but on the proviso that we’re going to have to listen to this commission and make some changes—or we’re going to be spending all of our military dollars on benefits.”